We value the safety of users' deposits more highly than anything else. It is the main reason we chose yearn.finance as our yield aggregator. While Alchemix will undergo security reviews and audits, there is no guarantee that something bad won't happen.Vaults have an emergency shutdown procedure in such a case. If this procedure is initialized, then all funds will be withdrawn from yearn.finance, deposits will be paused, and users can pay down their debt and exit the system safely, hopefully preventing or mitigating any losses.
Two additional security measures exist to protect the Alchemical synthetic tokens. First, there is a limit for how much alUSD can be minted from each asset. This limit depends on the level of technical, market, and legal risk for a given asset. Second, Alchemix will use Chainlink oracle price feeds. If a stablecoin's value is under a certain threshold, minting, repaying with the base asset, and liquidations will be paused until it's value is back to acceptable levels. These security measures will not completely prevent the damage from a stablecoin losing its peg or becoming devalued, but it will protect much of the Alchemical synthetic token's value .